September 20, 2017

MCK – Market expectations are for declining Uniform ROA, but management’s confidence about their global retail footprint and adjusted EPS implies this may be unwarranted


  • McKesson Corporation (MCK:USA) currently trades near recent lows relative to UAFRS-based (Uniform) Earnings, with a 16.2x Uniform P/E, implying fairly bearish expectations for the firm. However, given management’s confidence about their global retail footprint and adjusted EPS, this may be unwarranted
  • Specifically, management is confident about the potential of their expanded global retail footprint, and their ability to reverse recent declines in adjusted EPS. As such, expectations for declining Uniform ROA may be too bearish, and multiple expansion and equity upside may be warranted

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